Wedbush Upgrades Volterra Semiconductor (VLTR) to Outperform; Shares Overly Punished

October 21, 2009 9:21 AM EDT

Wedbush upgrades Volterra Semiconductor (Nasdaq: VLTR) from Neutral to Outperform. Price target $18.

Wedbush analyst says, "We upgrade shares of Volterra to Outperform as we believe shares were overly punished following disappointing 3Q results - a penny miss on higher legal expense. Specifically, while litigation will weigh on profitability, our confidence on Volterra's technology and top-line growth stands unwavered. We think Volterra's core business can throw off $1.10 of earnings power next year (ex-legal) driven by a diverse set of product cycles including high margin server (Nehalem, Magny-cours) and ramping notebook (Calpella). Further, we believe Volterra remains well-positioned in terms of IP and the upcoming case against IFX/Primarion - particularly given the favorable preliminary injunction granted on 9/30."

"If we were to look at Volterra strictly on a GAAP basis including legal, we find that risk / reward still looks favorable with downside / upside scenarios of $0.69 / $1.27 compared to our base case of $0.90."

To see more analyst ratings on VLTR Click Here.

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